The State of California has taken an unprecedented step with regard to transparency in the pricing of pharmaceuticals.

On Monday, October 9, 2017, California Governor Jerry Brown signed bill SB 17, which will mandate that drug manufacturers substantiate the need for price increases of their drugs to the public. Specifically, the bill requires the manufacturers to notify both private and public health insurers and plans at least 60 days prior to any price hike for any drug that amounts to more than 16% over a two-year period. Even more importantly, the drug manufacturer would be required to justify the need for a price hike by providing a public explanation.

According to Governor Brown, “Californians have a right to know why their medical costs are out of control, especially when pharmaceutical profits are soaring.” One of the goals Brown hopes to achieve with this bill is to level the playing field between the pharmaceutical leaders and those who struggle to pay for necessary medication.

Those in support of such a bill are spread across a variety of industries, including labor, business, consumer, local government and healthcare. Even health insurance companies have agreed to provide information and data to assist in effort toward transparency. Under the bill, they will have to disclose the premium increases which are attributable to the costs of drugs.

Supporters believe that such regulation is a necessity given that there has been a 127% increase in U.S. prices for top brand-name drugs between 2008 and 2014. In a world-wide comparison, other developed nations average just 41% of U.S. net drug prices for the 20 top-selling drugs. Scrutiny into these U.S. price hikes has been growing. In 2016, Mylan Pharmaceuticals was strongly criticized and publicly condemned for increasing the price of the EpiPen by more than 500% over a 10-year period.

Not surprisingly, the drug lobby has spent significant time and money opposing SB 17. This is likely out of fear that such a bill will become the national standard. Specifically, they argue that Governor Brown is not keeping the best interests of the patients in mind and that the bill could result in a drug shortage. They also assert that the bill does not allow for disclosure of the rebates and discounts that insurance companies and pharmacy benefit managers receive but fail to pass onto the patients.

Ultimately, SB 17 will not actually lower the prices of drugs in the U.S. It will, however, shed some light on the process used by pharmaceutical companies to set drug prices.

Advancing technology is allowing access to healthcare providers, quite literally, at your fingertips. Patients can reach their doctors by telephone, text, FaceTime, email and webcam. They can send vital signs, medical records and pictures of problems (like a nasty cut or a weird rash) to their doctors instantaneously. Likewise, doctors are making quick diagnoses of diabetes, heart attacks, strokes and other life-changing conditions. According to a recent article in The Wall Street Journal, over 15 million Americans received telemedical care in 2015 and those numbers could rise an additional 30% this year.

With all of this medical care being provided via rapidly changing technology this begs the question, “Who is keeping this all in check?”

The American Medical Association met in Chicago on June 13, 2016 at its Annual Meeting and adopted new ethical guidelines which will steer physicians in learning the differences in the delivery of medical care by telemedicine as compared to traditional office or hospital visits. The greater than 230,000-member group determined that while the fundamental ethical responsibilities of a physician providing care via telemedicine do not change, emerging technologies required the need for further guidance.

Some of the new guidelines include:

Disclosure of potential conflicts of interest

A physician is required to disclose to the patient any financial or other interest in particular telemedicine applications or services.

Privacy protections

Telemedicine applications and/or services must have appropriate safeguards in place for patient privacy and confidentiality. Those safeguards must help prevent unauthorized access to a patient’s account.

Disclosure of the limitations of telemedicine

Physicians should discuss the limitations of providing medical care via telemedicine and encourage patients who have a primary care physician to inform him/her about their telehealth care and follow-up in person when needed.

Recognition of the limitations of technology

Physicians must recognize that all of the relevant information needed to diagnose or treat may not be available through the technology used. For example, a physician conducting an exam via webcam may not be getting a clear picture of the patient’s current condition. The guidelines suggest having another health care professional at the patient’s location conduct an exam or obtaining vital information through other remote technologies.

The AMA’s full report and guidelines will be published and available in the next several months. The new guidelines will become part of the AMA’s Code of Medical Ethics.

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